Its funny no matter how hard you try to get a clean stream of your mkv files to your dlink DSM product it will never work..
read the product specs of the hardware before you expect something to work.. The entire DSM line does not support the MKV container!!
(with possibly the exception of the DSM 720) The DSM-720 supports H.264 but im not sure it has the ability to play the AC3 format.
Scream at dLink for a firmware update for our underachieving DSM 320/520 "HD" products!
.. maybe they will come to terms that h264 is the most popular format out there at the moment..
Sorry for the rant.. but its funny to see how people struggle to understand that the hardware (PS3, DSM's) just lacks the MKV container.. this limitation is crucial in what you want we all want.. a clean method to play mkv's on our media devices.. no messy transcoding!!
unfortunatly the only solution for our hardware is to transcode mkv's file on the fly with tVersity.. this changes the file format from mkv to mpg! in which the video isnt all that bad but the audio is diminished to 2 channels of wretched crap! those of us with a decent DD/DTS receiver dont want that garbage! We want to stream 5.1 surround with a nice crisp image! not too hard to ask..

right?
The only real solution i found to this whole mess is something like what dLink is now offering..
you can skip the whole tVersity thing all together with one of these:
http://www.dlink.com/products/?sec=0&pid=655this thing will let you designate a pc on your network to be a pseudo server of sorts.. instead of streaming/transcoding, you basically get a remote desktop feature on your HDTV.. then get yourself a copy of coreAVC **which is hands down THE best HD codecs on the market atm!!!

**
you can forget about ffdshow (most of which is extremely outdated by todays standards anyhow!!!) With this solution, if you have a smooth running MKV on your pc then you should see exactly the same thing on your TV.. the hardware itself does not process any video/audio meaning its not bias to any elite Matroska containers..
The only reason I play with tVersity these days is to share my media with the rest of the house.. which includes a PS3 and a DSM 520..
other then that I run my Vista MediaBox running VMC for all my goodies.. i literally get a 5-10% cpu load running the coreAVC pro codec while running a 1080p.mkv file.. its a beautiful thing.. a tremendous difference compared to transcoding with tVersity from MKV -> mpeg @ ~ 50% on my quad core
ok ok.. enough whining.. I have a successful solution to stream the mkv format.. Keep in mind this isnt the perfect H264+AC3 solution.. it is just a bearable one imo.. check out the post i reference for my solution
http://forums.tversity.com/viewtopic.php?f=28&t=23314 the only thing I did different was limited ffdshow to load only with tVersity (in the whitelist).. i have yet to experiment with CCCP in place of the recommended downloads in the post.. it should work hand and hand considering CCCP is based off ffdshow, I believe it has a more updated build of ffdshow.. I personally try to do my best to stay away from huge codec packs.. but I would have to say CCCP is one of the better ones out there.. once again keep in mind that this isn't the perfect solution as it will simply take your mkv file and transcode it to an mpeg format.. removing the nice sound quality as well as changing the video quality a bit.. it also bogs down the pc as tVersity needs to stress the resources of your machine while doing all this work..
I know most of my post kind of degrades the whole streaming/transcoded media idea.. I am NOT here to knock tVersity.. They have been a saving grace for me for many years now.. they have made an excellent program for what its worth! well I shouldnt say that either since they dont actually ask for money.. but really, for the majority of people out there this program is an excellent alternative to an HTPC..
thats my two cents.. and i dont care if you think im wrong!
thanks out to kaitoudark for posting the write up on the PS3 boards!